Can u solve this managerial accounting problem?

Cost-Volume-Profit Relationships and a Dog Track


The Key West Kennel Club is a dog-racing track. Its revenue is derived mainly from attendance and a fixed percentage of the pari-mutuel betting. Its expenses for a 90-day season are as follows:





Wages of cashiers and ticket takers 150,000


Commissioner’s salary 20,000


Maintenance (repairs, etc.) 20,000


Utilities 40,000


Other expenses (depreciation, insurance,


Advertising, etc.) 100,000


Purses: total prizes paid to winning racers 810,000





The track made a contract with PK, Inc., to park patrons’ cars. PK charged the track $4.80 per car. A survey revealed that on the average three persons arrived in each car and that half the attendees arrived by private automobiles. The others arrived by taxi or public bus.


The track’s sources of revenue are:


Rights for concession and vending 60,000


Admission charge (deliberately low) $ 1 per person


Percentage of bets placed 10%





Assume that each person bets $25 a night.


1. a. how many persons have to be admitted for the track to break even for the season?


b. if the desired operating profit for the year is $270,000, how many people would have to attend?


2. If a policy of free admission brought a 20% increase in attendance, what would be the new level of operating profit? Assume that the previous level of attendance was 600,000 people.


3. If the purses were doubled in an attempt to attract better dogs and thus increase attendance, what would be the new break-even point? Refer to the original data and assume that each person bets $25 a night.

Can u solve this managerial accounting problem?
Yes I can solve it.





But I'm not doing your homework for you. You will never learn the concepts by copying others work.
Reply:Question can't be answered unless you include the number of racing days in the season.

my bird